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How Australia survived the global financial crisis

Abstract:

The first major effect of the US subprime mortgage market was relt in Australia around August 2007 when the Australian mortgage lender RAMS announced that it was unable to sell $6 billion' of its securitized debt in the global financial market. The RAMS financing model depended on selling home loans in AustralIa, securitizing these and then seUing the securitize<! debt in international financial markets. Following this announcement, the RAMS share price rell $0.82c to $0.57c. The announcement had an Immediate detrimental flow-on effect On the share prices of other financial institutions including the Macquarie~ Adelaide and St George banks, as well as several other highly geared non-bank companies such as Centro Properties,